PRINCIPLES OF MARKETING

1. define and understand marketing

2. describe the traditional approaches to marketing
3. discuss the goals of marketing
4. identify and explain contemporary marketing approaches

MARKETING is the creation and communication of value to customers. It involves the customer’s
maintenance of relationships that should last for lifetime. It is the link between society’s material requirements
for its needs and wants. Marketing must satisfy human needs and wants through the exchange process and the
building of long-term relationships.

Many view marketing as process or dynamic business activity that is designed to plan and promote the delivery
or satisfy needs and wants of the potential and present market.

In the definition of marketing given by the American Marketing Association or AMA, “Marketing is an
organizational function and a set of processes for creating, communicating, and delivering value to customers
and for managing customer relationships in ways that benefit the organization and its stakeholders.” The
definition views as an exchange process or discipline that involves strategies, activities, positions, and
institutions.

The definition of Marketing according to Dr. Philip Kotler, “A social and managerial process whereby
individuals and groups obtain what they need and want through creating and exchanging products and
value with others.” It is also defined as the meeting of the minds between the seller and the buyer to satisfy
human needs and wants with profit on the part of the marketer and the satisfaction of thee buyer for the money
he spent. On the bases of this view, marketing is an organization intervention and functions that set the process
of creating, communicating and delivering value to customers.

From the academic point of view, marketing is the art and science of creating tangible products or services and
finding the market, getting and retaining them to attain profitable operations. On one hand, it is a societal
process that marketers must communicate the sustainable value of the product or service to its target market. It
is a critic a business process for attracting customers to satisfy their needs and wants.

Marketing is also an integrated process through which companies create value for customers and build strong
customer relationships in order to capture value from customers in return. Simply put: Marketing is the
delivery of customer satisfaction at a profit.

Two Interacting Components of Marketing

COMPANY MARKET

The company and its market are equally important. It is marketing that gives fulfilment to both components.
Marketing people should balance between the company’s requirements for profit and desired market share.
This is composed of two other interacting components: the customer and competition. The overriding objective
of the company is not just to satisfy the needs and want of its customer. It must profitable and better than its
competitor. Otherwise, the competitor could win the customers because it is able to satisfy them.

CUSTOMER NEEDS and WANTS

Need is one important component in the marketing of products. The product or service must have specific
benefits that satisfy the functional or emotional needs. On the other hand, basic needs are food, clothing, and
shelter. We cannot live without them and marketers must be able to provide them to human population.
Food can be processed in different tastes, styles and menus that shall meet the human craving and satisfaction.
Clothing could be designed into different styles depending on people’s taste and social values. Shelters are
constructed differently depending on the capacity of the buyer to finance his home. These needs are the
marketer’s point of interest for profit.
Wants are higher-level human needs as they appeal more to the emotions. These are the social needs for
recognition and the development of higher social satisfaction is limitless. The development of technology and
different electronic gadgets are more of human wants. The marketers must continuously improve technological
inventions to sustain customer wants.

Traditional Marketing seeks to pull customers to a product, whatever the cost. It is a non-interactive
approach. It is, for this reason, considered to be out-dated as it does not consider the customer they are selling
to, more the market that the company operates within.

What is Traditional Marketing?

Traditional marketing is an umbrella term that covers the wide array of advertising channels we see daily.
1. Print Marketing; newspapers, magazines, fliers, brochures, etc.
2. Broadcast Marketing; tv ads, radio ads.
3. Referral or Word of Mouth

These may include print media, billboard and TV advertising, flyer and poster campaigns and radio broadcast
advertising. These traditional marketing messages are not necessarily out-dated, however, research has shown
those companies that have abandoned simply using these channels, and adopted contemporary marketing
channels proposed in this article, have remained prosperous and in fact seen an increase in leads, a higher
quality of leads, sales and traffic to web content.

Ansoff's Matrix Theory

Traditional marketing theories include Ansoff's Matrix, a theory that proposes products/services fall
into one of four categories (Market Penetration. Product Development. Market Development. Diversification.)
depending on the market and the product released. New Product- New Market is considered as
diversification. This theory recommends that businesses should try to diversify their product portfolio to
spread risk amongst their product range. An example of this would be when Apple created the first iPhone
released in 2007. This product was new and introduced into a new market. Apple soon reaped the benefits of
introducing this hugely popular phone. Their product range grew from accommodating for designers on the
Apple Mac, to mobile devices, tablet devices, watches and beyond.

The Marketing Mix

Another marketing theory that's considered to be traditional is the marketing mix. made up of the 7 P's. These
include product, place, promotion, price, packaging and positioning. All these components, when
combined, create a solid marketing proposal. However, this theory as well as Ansoff's, can be drastically
improved with the use of contemporary marketing strategies.

Traditional concept marketing is a marketing strategy a company uses to determine if it can produce a viable
product consumer want or need, whether the company can produce enough products to fill the need, and the
marketing method by which the need can be filled.
Several Distinct Traditional Approaches:
1. Production concept focuses on the internal potentials of the company and not based on the desires and
needs of the market.
2. Marketing concept a philosophy which states that organization must try hard to find out and satisfy
the needs and wants of consumers while at the same time accomplishing the organizational goals.
3. Sales concept refers to the idea that people will buy more goods and services through personal selling
and advertising done aggressively to push them in the market.
4. Relationship concept/marketing an approach that centers on maintaining and improving value-
added long-term relationships with current customers, distributors, dealers and suppliers.
 5. Societal Marketing Concept views that organizations must satisfy the needs of consumers in a manner
that gives for society’s benefit.

Goal: Attract new customer by promising superior value and keep and grow current customers by delivering
satisfaction.

Goals of Marketing
1. Focusing on customer wants and needs to distinguish products from competition.
2. Integrating all the organization’s activities to satisfy customer wants and needs.
3. Achieving the organization’s long-term goals by satisfying customer wants and needs

The Goals of Marketing and their Social Effects

1. Maximize the Consumption of Goods - The Aggressive marketing strategies and policies
had increased the consumption of goods and services. The demand of the market is tremendous. Sellers
face many challenges on what products to offer. Buyers want quality products at reasonable price and t
the most convenient location. The marketing job is to stimulate greater product consumption. Greater
production requires consumption of material inputs and more goods in the market that create more
employment. More jobs are created, and more people enjoy economic wealth. Maximum consumptions
generate economic development for the nation.
2. Maximize Consumer Satisfaction - The market demand is varied, and customer
satisfaction is the challenge of the marketing organization. Measurement of customer
satisfaction is difficult. It embraces careful analysis of the market demand which varies with the time
and the social development of society. The customer may be satisfied with the product the marketing
people produce but it may create pollution to the environment. Plastics are good packaging materials for
consumer goods but they create flood and environmental pollution. Cars and other vehicles using gas
serve the convenience of the riding public, but they create global warming that result to environmental
imbalance.
3. Maximize Choice of Goods or Service - Some marketers believe that the goal of
marketing is to maximize the variety of the product in the market and provide consumers a wide
assortment of choices. The main objective is for customers to find the goods that will satisfy their
biological needs as well as their emotional and social wants. Development of new products needs
research but that will mean time and costs. Maximizing consumer choice entails cost as the economies
of scale do not operate in production of goods. The consumers must spend time studying the benefits of
the production of goods.
4. Maximize the Quality of Life - The improvement of the quality of life is the target of marketing
people. New hand phones are created to communicate with various sectors of society, friends and
families. Easy communications access satisfies not only social needs but also business requirements.
Compu0terss and others electronic gadgets bring pleasures to homes and enjoyment of the comfort of
living. The quality of life is difficult to measure. Life satisfaction is more than the physical comfort. The
impact of electronic radiation has created health problems among the many users of modern gadgets.
People in the previous generations lived longer because they lived a simple life. They ate unadulterated
food and lived free from pollution and radiation.

DEFINITION OF CONTEMPORARY MARKETING

Simply defined, contemporary marketing refers to marketing strategies that are consumer focused.
Contemporary marketing strategy offers products and services based on what the target market desires rather
than what the company wants them to have, thereby, offering greater support for their customers and becoming
able to take advantage of more advanced marketing funnels to track progress. INTERACTIVE approach.
Emerging Types of Marketing and their Applications
Based on a 2017 report by Kleiner Perkins Caulfield and Byers, an internet trend investment firm, 3.4 billion
people use the internet. Therefore, the internet has become an easy and quick way to research, reach and engage
customers.
1. Search engine optimization is majorly concerned with increasing a business ’visibility and
rankings on search engine result pages. It is a simple way of attracting organic traffic of potential
customers to a website. SEO can be maximized with paid adverts (Google AdWords), strategic content
marketing and social media networks.
2. Pay per Click advertising: This is advertising presented on search engine result pages or web
pages where the advertiser is only charged based on the number of times someone clicks on the ads to
go to the advertiser's targeted website.
3. Email marketing is a type of marketing based on the distribution of messages through
emails. Email marketing provides direct contact with customers and allows businesses to create
relationships with their customers. Updates, exciting news, and call to actions can be sent directly to
customers.
4. Referral marketing: is a type of marketing where an individual or customer pleased with the results
gotten from a product refers the product to another person. It's a very subtle form of marketing that can
provide great results especially when the person referring is an Influencer in that industry.
5. Affiliate marketing: is a prominent type of internet marketing where a third party promotes a
product and earns commission, or a piece of the profit gotten from every sale made through that referral.
6. Video marketing: Videos act as one of the most interactive types of online marketing and can prove to
be a great way to raise awareness about a business or product. In fact, according to Mushroom networks,
YouTube is the second biggest search engine. Therefore, video marketing can prove to be a great way to
pass messages to target customers.
7. Inbound marketing is a very powerful contemporary marketing strategy that focuses on different
tactics to draw consumers in and convince them to buy goods. It is one the result-oriented types of
marketing that uses content to drive results. A key subset of Inbound marketing is Content
marketing which the Content Marketing Institute refers to as "a strategic marketing
approach focused on creating and distributing valuable, relevant, and consistent content to
attract and retain a clearly defined audience."

Green marketing refers to the process of selling products and/or services based on their environmental
benefits. Company are selling products and/or services by first promoting its benefit that is environmentally
friendly or produced in an environmentally friendly way. For green marketing to be effective, there are three
things that needs to be done:
1. Being genuine
A. The company is doing what it claims to be doing in its green marketing campaign and;
B. The rest of the business policies are consistent with whatever the firm is doing that’s
environmentally friendly.
2. Educating the customers isn’t just a matter of letting people know that the company is doing whatever it
doing to protect the environment, but also a matter of letting them know why it matters.
3. Giving customers an opportunity to participate means personalizing the benefits of the company’s
environmentally friendly actions, normally through letting the customer take part in positive
environmental action.
 CUSTOMER RELATIONSHIP
What is Customer?
Although the terms "customer" and "consumer" are often used interchangeably, they are not synonymous
(Friesner, 2014). A CUSTOMER is a person or business who purchases goods and services from a store or
firm. When a customer consumes the goods or services, he or she is considered a CONSUMER. The terms
B2C and B2B are commonly used in marketing. The distinction between the two is seen in the diagram below
(Friesner,2014).

RELATIONSHIP MARKETING
Customer loyalty, engagement, and long-term management are all goals of relationship marketing (Olenski,
2013). Its goal is to strengthen client relationships by providing them with information that is directly relevant
to their needs and concerns, as well as fostering open communication (Chegg Study, n.d.).

Customer Relationship Management (CRM) highlights relationship marketing, which focuses on consumer
loyalty and long-term commitment rather than short-term goals like customer purchases and individual
transactions (Rouse, 2019). In the world of sales, one acronym reigns supreme: “CRM.”

As cited by Rouse in 2019, Customer Relationship Management (CRM) is the “combination of practices,
strategies, and technologies that companies use to manage and analyze customer interactions and data
throughout the customer lifecycle, with the goal of improving customer service relationship and assisting in
customer retention and driving sales growth.”

It is a strategy for managing a business's interactions with present and potential customers.
It refers to the process of establishing and maintaining valued customer relationships by giving exceptional
customer value and satisfaction (Cihangir, 2008). It covers all areas of client acquisition, engagement, and
growth.
VALUE OF CUSTOMER RELATION AND CUSTOMER SERVICE
Customer value and satisfaction are key components in the development and management of customer
relationships.
Value and Satisfaction

Customer Value
To certain customers, value may mean reasonable items at moderate costs. To different buyers, in any case, it
may mean paying more to get more (Kotler et al., n.d.).

Customer Satisfaction
“The extent to which a product's perceived performance matches a buyer's expectations” (Flashcard Machine,
2013). Smart businesses strive to delight their customers by offering only what they can provide and then
exceeding their expectations.

If the product fails to meet the client's expectations, the client is dissatisfied. If the performance meets the
customer's expectations, the customer is satisfied. The customer is highly satisfied or delighted if the
performance exceeds expectations (Binus University, 2017).

Capturing Value from Customers

When a company gives excellent customer value, customers are more likely to be loyal and purchase more. The
company's long-term earnings will improve as a result. Delivering customer value results in customer loyalty
and retention, market share and customer equity, and customer equity.

Creating Customer Loyalty and Retention

Customers who are satisfied with the firm and its products remain loyal and tell others about it. Customer
relationship management aims to increase customer delight as well as satisfaction.

Customer Lifetime Value

The total value of all purchases made by a consumer over the course of a lifetime of patronage.

Exchanges, Transaction, and Relationships

MARKET OPPORTUNITY ANALYSIS AND CONSUMER ANALYSIS
A. STRATEGIC MARKETING VERSUS TACTICAL MARKETING
1. Company Strategic planning: Start by determining what types of business the company will be in and what
its aims will be for each, as per Kotler et al (Stanford, n.d.).
2. Strategic Marketing: Kotler et al explains that strategic marketing is the marketing reasoning by which a
business unit aspires to attain its marketing objectives (i.e. marketing strategy, marketing environment, and so
on) (Stanford, n.d.).
3. Tactical Marketing: tools and techniques we have at our obligation to act (Stanford, n.d.).
For every strategy, you must select the tactics and procedures to take. Below are some of tactic examples.

As you can see, the marketing methods you choose should be the final thing you do.
Furthermore, strategy marketing is a plan to attain an objective or a goal - it may be increasing sales volume in
rural areas, getting more women to vote in the Assembly election, or becoming the market leader in cosmetics,
for example (EDUCBA, 2020).
Tactics refers to how you carry out your plan. Politicians may distribute sarees for free in a given area to win
women's votes; a firm may invest heavily on mass media campaigns and sponsoring beauty pageants to be the
leader in the cosmetics market (EDUCBA, 2020).

When strategy and tactics are combined, the end effect might be an increase in product demand, increased brand
awareness, and increased sales volumes. Alternatively, a company may use competitive pricing to keep ahead of
the rivalry in the marketplace or to maximize sales volume (EDUCBA, 2020).

The strategy, or marketing plan, must obviously come first, followed by the techniques. This is not to ignore
the importance of marketing methods. According to Jim Joseph, a marketing strategist and author, techniques
are crucial because they connect with customers and drive them to purchase (EDUCBA, 2020).

Everything revolves around the 4Ps in tactics. It was previously thought that knowing the 4Ps of marketing –
Product, Price, Place, and Promotion – meant knowing everything. The market, on the other hand, is much more
complicated and difficult to understand for the ordinary individual (EDUCBA, 2020).

Product dynamics are important. In light of the competition, it may be necessary to alter or discard the product
and develop a new one. For example, mosquito repellents were once smoke coils that caused many individuals
to have breathing issues and polluted the area with ash.
Following that, companies began to produce liquid repellents that functioned on the electric current by gently
discharging the liquid and emitting a noxious odor that drove mosquitos away (EDUCBA, 2020).
Pricing is the most common strategy used by businesses to achieve their goals. It is, however, the most difficult
of the marketing approaches to master. A price that is regarded as too low may cause customers to mistrust the
product's quality and value. Buyers may be tempted to competing deals if the price is thought to be too high.
Pricing can be divided into two categories: strategic pricing and tactical pricing. Strategic pricing analyzes the
organization's long-term profit objectives, whereas tactical pricing focuses on attaining short-term goals such as
a festival deal, a 50% off end-of-season discount, and so on (EDUCBA, 2020).
Place and geographical targeting. The majority of the things are affected by changes in geography and
culture. In the city, what sells in the rural may not sell in the city. Low-cost cars may be better suited to
emerging markets than developed markets, whereas regions with extreme cold, humidity, and heat demand
items designed specifically for that region (EDUCBA, 2020).
Promotions and the changing technologies. . Informing consumers about a brand using mass media, email
campaigns, social media, billboards, banners, involvement in events, and trade exhibits is what marketing
promotion comprises. A marketing plan that aspires to achieve long-term goals must include marketing
communication initiatives. Millennials (those born between 1980 and 2000) have a distinct attitude when it
comes to purchasing, spending, and consuming patterns. This generation is more receptive to online, social
media, and mobile technology, and they are more likely to share everything with their online acquaintances. As
a result, more effort must be made to reach out to this population. As a result, marketers may take advantage of
this tendency by providing Millennials with excellent customer experiences that encourage them to tweet about
the firm or tell others about their purchase (EDUCBA, 2020).
GSOT- goal, strategy, objective, and tactics is the ideal way to design a marketing plan, according to Mikal
E. Belicove. A goal is a broad primary outcome, whereas a strategy is a plan, an objective is a quantifiable step,
and tactics are the tools and procedures utilized to put the strategy into action (EDUCBA, 2020).
As a result, shifting market dynamics need a shift in marketing strategy and approaches. A product's failure to
adjust with the times might cost it, as Arm & Hammer baking soda did in the 1970s when demand in
households fell. It helps Church & Dwight, Inc. achieve its goal of encouraging existing consumers to buy the
yellow box at the store and utilize more baking soda.
The company chose to make ecologically friendly cleaning products in order to market Arm & Hammer as a
fridge deodorizer. The company kept its yellow box with the red Arm & Hammer logo, which has been around
since the 1860s and is clearly recognizable (EDUCBA, 2020).
Refer to info graphic, as seen below.
B. THE MARKETING ENVIRONMENT
The marketing environment is a mix of external and internal elements and forces that influence a company's
capacity to build relationships with and serve its customers (Pahwa, 2019).
The actors and forces outside of marketing that affect marketing management's capacity to create and maintain
effective connections with target customers are referred to as a company's marketing environment by Philip
Kotler (Pahwa, 2019).
Within the marketing environment, there are two types of elements: micro and macro.
These external elements are outside the marketers' control, but they nonetheless have an impact on the decisions
taken when developing a strategic marketing plan (Oxford College of Marketing, 2014).

Elements of Macro- and Micro-Environment

The marketing efforts of the firm are influenced by a number of internal and external elements, according to
feedough.com. While some of the causes are within the company's control, the majority are not, and the
company must adapt to prevent being impacted by changes in these elements. These external and internal
factors combine to create the marketing environment in which the company operates (Pahwa, 2019).
MICROENVIRONMENT FACTORS
The micro-environment refers to the internal environment. Internal forces and key outcomes that are directly
related to the business are taken into account. Customers, partners, competitors, and the general public are all
covered, as are suppliers, market intermediaries, and customers.
➢ All partners who give resources to the organization are considered suppliers.
➢ Market intermediaries are those who help the organization distribute its product.
➢ All separate entities that conduct business with the company. Partners include companies like advertising
agencies, market research organizations, banking and insurance institutions, transportation companies, brokers,
and so on.
➢ Customers are the organization's target market.
➢ Competitors are companies in the same market that target the same clients as that of the organization.
➢ The term "public" refers to any other group that has an actual or future stake in the company or has an
impact on its ability to serve its consumers.
The internal environment is the business itself (Ilano, 2016), which comprises all of the dynamics and
circumstances that affect marketing activities within the organization. These elements can be classified as part
of the business's Five M's (internal resources), which include management, manpower, money, materials,
and machinery, including technology.
The marketer has influence over the internal environment, which may be altered in response to changes in the
external environment.
Michael Porter's 5 Forces Model is a widely used framework for analyzing an industry's competitive
environment (Ilano, 2016). The Porter Model is being utilized to determine the organization's Strengths and
Weaknesses.

It is made up of five forces: competitive rivalry, threats from new entrants, supplier bargaining power, buyer
bargaining power, and threats from substitutes (Ilano, 2016). It shows dynamic interaction between and among
the forces, as illustrated by the arrows. New entrants, and substitutes and complements enter rival firms in an
existing industry, as do suppliers and customers. The cyclical arrows in the middle indicate continuous
movement of industry participants. The rival firms appear, and horizontal positions are “buffeted” by all five
forces, including the position that they belong to. At any point in time, each force in the model may change
(Garalde-Orjalo, 2017).
These forces bring risks and threats to the firm. Where the competitors can steal market share from the firm or
even alter the market’s perceptions about the firm’s product, threats from new entrants offering more attractive
and better products or services, threat from substitutes that can steal the market share because of alternative
products or services that offers the same quality or equivalent result, threats in suppliers which can decide to
increase their prices or to even become potential entrants to the industry as well, and the buyers may threaten
the firm through additional demands and can also become potential entrants if they feel to (Ilano, 2016).
MACRO ENVIRONMENT FACTORS
The macro-environment, also known as the external environment, is made up of external forces and
variables that influence the industry but do not have a direct impact on the business. At the macro level, the
macro environment is made up of environmental elements that are often outside any organization's control
(Ilano, 2016). It may be defined by the acronym PEST– Political, Economic, Sociological, and Technological
variables; another variation is PESTEL which includes Environment and Legal factors (Garalde-Orjalo,
2017). PESTEL model is being used for macro-environmental analysis to identify the Opportunities and
Threats of the organization in external environment.
The acronym PESTEL/PESTLE stands for a tool that is used to identify an organization's macro (external)
factors. It aids an organization in identifying external variables that may have an impact on their market and
analyzing how they may affect their business directly. When doing such an analysis, it is critical to not only
identify but also evaluate the aspects that affect the organization (Oxford College of Marketing, n.d.).
C. MARKETING RESEARCH
Marketing research, according to the American Marketing Association (AMA), is the systematic collection,
recording, and analysis of data about issues relevant to the marketing of goods and services.
“Marketing research is the function that links the consumer, customer, and public to the marketer through
information–information used to identify and define marketing opportunities and problems; generate, refine,
and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a
process. Marketing research specifies the information required to address these issues, designs the method for
collecting information, manages and implements the data collection process, analyzes the results, and
communicates the findings and their implications,” approved in 2017 (American Marketing Association, 1970).
The systematic creation, collecting, analysis, and reporting of data and findings related to a company's specific
marketing situation.
It is a role within a company's Marketing Information System (MIS) that is primarily responsible for acquiring,
analyzing, and disseminating information to marketing decision makers in a timely manner (Ilano, 2016).
Marketing research is the function in charge of gathering and analyzing market and consumer-based data to
make decisions and determine marketing strategic direction.
Marketing research isn't a science without problems. It's about individuals and their constantly shifting emotions
and behaviors, which are influenced by a range of subjective factors.
To conduct marketing research, you must gather data and opinions in a methodical, unbiased manner in order to
identify what people want to buy, not just what you want to sell.

Importance and Purpose

It is impossible to offer products or services to customers who do not desire them. Marketing research is
necessary to figure out what customers want and how to give it in an appealing way. Small enterprises have an
advantage over larger corporations in this regard. Large corporations must hire professionals to do mass market
research, whereas small businesses are closer to their customers and can learn about their buying habits much
faster. Small business owners have a solid sense of their customers' needs based on years of experience, but this
knowledge may not be current or relevant in today's market.
Marketing research is the process of focusing and organizing marketing data. It guarantees that such
information is up to date and allows business owners to:
➢ Reduce business risks
➢ Spot current and upcoming problems in the current market
➢ Identify sales opportunities
➢ Develop plans of action
➢ Identify worthwhile new product and services
➢ Identify market opportunities and threats
➢ Determine the level of customer satisfaction
➢ Pinpoint and anticipate market trends or changes
➢ Decide on the best advertising and promotional campaigns
➢ Evaluate the results of test making
➢ Evaluate the results of packaging, brand name, and label testing
➢ Determine consumer price awareness and sensitivity
➢ Undertake location studies
Most business owners conduct market research daily without even realizing it. Analyzing returned merchandise,
questioning former customers about why they switched, and comparing prices with competitors are all instances
of market research.

Marketing Research Process

This is the simple process on conducting a marketing research. Through this, is the crafting of marketing plan.
Formal marketing research just organizes this common procedure. It serves as a framework for organizing
market data.

Market research, like other aspects of marketing such as advertising, can be straight forward or complex. Basic
market research could be as basic as include a questionnaire with your customer bills to collect demographic
information. On the more complicated side, you may hire a market research firm to do primary research to aid
in the development of a marketing strategy for a new product launch.
Understanding the phases in the market research process can help you no matter how basic or complex your
marketing research project is.

Market Research – The Process

1. Defining the problem and research objectives
The market research process starts with identifying and characterizing the difficulties, as well as opportunities,
that your company faces (Ilano, 2016), such as:
• A new product or service is being launched.
• There is a lack of knowledge about your organization and its products or services.
• Your company's products or services are underutilized. (Your company is wellknown in the market, yet no one
wants to do business with you.)
• A negative image and reputation for the company.
• Distribution issues: your products and services are not reaching the buying public on time.
After defining a marketing problem or opportunity, the following stage is to set objectives for your market
research operations. Your objective could be to have a better understanding of the nature of a problem so that
you can better define it. Maybe you're attempting to figure out how many people will buy your product if it's
packaged in a specific way and sold at a specific price.
You could even want to investigate if there are any possible cause-and-effect relationships. What additional
sales volume might you expect if you cut your price by 10%, for example? How much of an impact will this
plan have on your bottom line?

2. Developing the research plan for collecting information

Primary research, or information obtained for a specific purpose, and secondary research, or information that
already exists, are the two categories of research. There are various activities and ways of conduct involved
with both forms of research. Secondary research is typically easier to come by and less expensive than primary
research. Secondary research might be as easy as going to the library or a corporate information center, or
simply surfing the Internet. Decide if you'll use primary or secondary data for your investigation.
Primary Research. For the first time, data was gathered. Used just for the problem or issue under investigation.
Surveys/questionnaires, observations (activities are observed or recorded), point-of-sale research (qualified
respondents), and focus group discussions are just a few examples. It can be as simple as asking customers or
suppliers how they feel about a business, or as complex as surveys conducted by marketing research firms or
the researcher themselves (s). Direct mail questionnaires, telephone surveys, experiments, panel studies, test
marketing, and behavior observation are all examples of primary research. Primary research is divided into two
types: reactive and non-reactive. Non-reactive primary research examines how real individuals behave in
real-world situations without unwittingly influencing them. Marketing professionals should conduct reactive
research, such as surveys, interviews, and questionnaires, because they can usually obtain more objective and
sophisticated data.
Secondary research is the process of gathering information from other sources. It has already been gathered
for a reason unrelated to the problem or issue under investigation. It takes information from previously
published or existent sources like surveys, books, and journals and applies or reorganizes it to the problem or
opportunity at hand. Consider the following scenario: a tire salesman might believe that current retail tire sales
are strongly tied to new car sales three years ago. Comparing new car sales with replacement tire sales three
years later is an easy way to test this theory. This will either confirm or disprove the concept, and if done over a
period of time, will greatly benefit marketing efforts.

3. Implementing the research plan – collecting and analyzing the data

In order to obtain clear, unbiased, and reliable results, your research instrument should be precise in terms of
what you aim to achieve. Collect data under the supervision of knowledgeable researchers. It is critical to get
advice or supervision from a professional. Stick to the goals and rules you established in Steps 2 and 3 for the
approaches and strategies you used. When acquiring information, try to be as scientific as possible.
After your data has been obtained, it must be "cleaned," which includes editing, coding, and tabulating the
results. Start with a simple constructed study instrument or questionnaire to make this process easy.
The following are some useful ideas for organizing and analyzing your data.
➢ Look for data that is relevant to your current market demands.
➢ Subjective data should only be used to back up more general findings from objective research.
➢ Analyze for consistency and compare the findings of different data collection methods. Are the market
demographics offered by the local media outlet, for example, consistent with your survey results?
➢ Quantify your findings; look for common points of view that can be added together.
➢ Read between the lines if you want to get a better idea of what's going on. Combine census data on middle-
income levels in a certain location with the amount of home owners vs. renters in the area, for example.

4. Interpreting and reporting the findings

Interpreting and reporting the findings Once you've gathered and analyzed marketing data on your target
market, competitors, and environment, offer it to the business's decision makers in an organized manner. For
example, you might wish to include your findings in the market analysis section of your business plan. You
might also want to familiarize your sales and marketing personnel with the information or host a training event
for the entire company. In summary, the resulting data was developed to aid in the making of business
decisions, thus it must be easily available to those who make those decisions.

D. CONSUMER AND BUSINESS MARKETS

Consumer Markets
It incorporates people, as well as families, who buy goods and services for individual use.
They typically make buys in smaller amounts because of their tendency to spend products slowly over a period
(Calleja, n.d.).
Consumer buying behavior - buying behavior of end-users, people, and family units that purchase
merchandise and services for personal use.
Customer buying decision is influenced by different factors such as:
1. Cultural factors (culture, subculture, and social class);
2. Social factors (reference groups, family, friends, role, and status);
3. Personal factors (age, life cycle stage, personality, attitude, occupation, economic status, lifestyle, and
values); and
4. Psychological factors (motivation, perception, learning, beliefs, and attributes).

a) Complex buying behavior - a consumer attempts a great deal of looking and examining before any
significant buy happens where there are so various highlights and traits with every item mark having various
indications of each feature (Ilano, 2016).
b) Dissonance-reducing behavior - buyers opt to choose to ease their decision. For example, purchasing the
brand that a great many people pick, depending on the choice of a trusted companion or a friend, or depending
on the suggestion of the salesman (Ilano, 2016).
c) Variety-seeking behavior - happens when the item has minimum risk. However, there is such a significant
number of numerous decisions where there are wide assortment of the items, each with its own highlights and
qualities, wherein customer may pick to try every item in any event once (Ilano, 2016).
d) Habitual buying behavior - comparison of various contending items is not significant, so buyers would
prefer to choose the item that they are generally comfortable with. Shopper purchase these products habitually
(Ilano, 2016).

BUSINESS MARKETS (ORGANIZATIONAL MARKET)

Offering to the retail market is a challenging proposition. Selling straightforwardly to organizations –
businesses, institutions, government units, and different groups – permits you to have an operation with
potentially lower overhead, as these organizations usually place large purchase or bulk and are generally
concerned about item quality, serious costs, and service quality (Ilano, 2016).
Examples of organizational markets:
• Manufacturers
• Restaurants in quick service food chains
• Wholesalers and retail chains
• Companies that specialize in marketing and distribution
• Local government units (LGUs)
• Government owned and controlled corporations (GOCCs)
• Nonprofit organizations
• Hospitals in health centers
Business buying behavior - refers to the buying patterns of companies that buy products to use in the
manufacture of other goods and services that are then sold, rented, or supplied to others.

Business buying process - is the process through which business buyers determine the goods and services they
should purchase, then search for, evaluate, and select among various brands.
Buying Process
Based on Ilano, the buying process can be summarized as follows:
Problem Recognition (acknowledges the need)
General Need Description (forms are filled out that justify the need for the purchase)
Product Specification (technical personnel provide specific technical details of the needed product or
service)
Supplier Search and/or Proposal Solicitation (potential suppliers are sought out or ads are placed to invite
potential bidders)
Supplier Selection (selection is based on pre-established guidelines, leading to the determination of the
supplying enterprise)
 Order-Routine Specification (if purchase order is made out and there is a recurring purchase for long-term,
therefore it is a routine transaction)
Performance Review (evaluation of both product and the relationship with the supplier; if it is necessary to
look for an alternative supplier on the next transaction)

MARKETING SEGMENTATION, MARKET TARGETING, AND MARKET

POSITIONING (STP)
Market Segmentation
It is the method through which advertisers divide potential customers into smaller groups who are looking for
similar product benefits (Go, 1992). It is when you divide customers into distinct groups (segments) based on
their demands, attributes, or behavior. Organizations separate enormous, heterogeneous markets into smaller
segments that may be served more economically and effectively with products and services tailored to their
specific requirements (Negm, n.d.).
The segment(s) or group(s) of individuals and organizations to whom you select to advertise your product or
service is referred to as the TARGET MARKET. Targeted marketing, also known as differentiated marketing,
is the capacity to distinguish specific parts of marketing (offering, promotion, and price) for different client
groups. Targeted marketing, on the other hand, is more similar to shooting a rifle; you aim and focus your
message on a specific type of customer (Principles of Marketing [ AUTHOR REMOVED AT REQUEST OF
ORIGINAL PUBLISHER], 2015).
Marketers segment the market by geographic, demographic, psychographic, and behavioral.

Geographic Segmentation: Identify the physical location of a market and segments the target market from
broad physical location to a specific location. Example from World Region or
Density or Climate (Negm, n.d.). Also, it includes the location’s general characteristics and factors such as
climate (e.g. Baguio City has a cooler climate), traffic conditions (e.g. EDSA), cultural characteristics,
livelihood opportunities, and population density (Ilano, 2016).

Demographic Segmentation: It refers to any quantifiable and factual piece of information of the population
that is collected by the Philippine Statistics Authority or PSA (Ilano, 2016). Age, gender, generation, family
size, life cycle, income, occupation, education, religion, race, and nationality are all used to divide the market
into groups. In addition, it answers questions such as: “Who are they?” and “How much do they earn?” (Go,
1992).
Psychographic Segmentation: It refers to how consumers see and feel about themselves. Buyers are divided
into groups based on their socioeconomic class, lifestyle, and personality (Ilano, 2016). In addition, it answers
questions such as: “What do they do?” and “How do they spend their money?” (Go, 1992). Example, iPhone
perceived as classy with luxurious feels.

Behavioral Segmentation: It is about how we think about ourselves, our buying behavior, whether these
actions are conscious or unconscious, example is Jollibee’s “langhapsarap” burger which appeals to a usual
Filipino behavior of smelling food to appreciate it more before eating it (Ilano, 2016). It is here that we divide
the market into segments based on characteristics such as occasions, benefits, user status, usage rate, loyalty
status, stage of preparedness, and attitude toward the product.

MARKET TARGETING
Targeting comes into play once the many viable markets have been discovered and separated into distinct
groups. It is here that we may efficiently identify the exact group that can be addressed most effectively (Ilano,
2016).

We examine the desirability of each segment and choose one or more segments to enter through market
targeting. A target market is a group of clients with similar requirements or characteristics who the company
seeks to serve (Negm, n.d.).

According to Negm, the following aspects should be considered when determining which market segments to
target:
• Segment Size and Growth: Examine current sales, growth rates, and predicted profitability for various
segments.
• Segment Structural Attractiveness: Consider the effects of competitors, the readiness of alternative
products, and the power of buyers and suppliers when segmenting structural attractiveness.
• Company Objectives and Resources: The talents and resources required by the company to succeed in that
segment(s) and seek competitive advantages.

MARKET POSITIONING
Market positioning - is the process of arranging a product in such a way that it occupies a unique, distinct, and
appropriate position in the minds of target buyers when compared to rival products (Negm, n.d.).

Positioning - is the method of conveying the image of a brand into the minds of consumers. It must be unique,
beneficial, and credible as these are the element of a good brand position (Calleja, n.d.). It may answer the
question, "What makes your product different?"

Brand awareness leads to brand association, and this is where positioning comes in. It highlights significant
characteristics or benefits that distinguish products in the consumer mind (Go & Escareal-Go, 2011).
Positioning aids as the talking points to be highlighted by the marketer to his customers. For example, Gardenia
positioned its wheat bread as the “healthy bread” because of its high fiber content, or Promil is clearly
associated with gifted kids (Go & Escareal-Go, 2011).

The basic template for this positioning statement would be:

< Product name> will be the <position> for the <target market>, <elaboration>.
Examples: <Mahusay Bank> will be the <intelligent choice> for the <executive class>, <providing
sophisticated financial instruments not found in other banks>.